Bad Analysis Hurts Technology Policy

February 5, 2014

Developing technology policy is difficult because it requires an understanding of law, economics, engineering and policy analysis, says Richard Bennett, a visiting fellow at the American Enterprise Institute.

As so few people have expertise across all of those fields, they tend to rely on other experts' judgments. Unfortunately, policy advocates often misstate -- intentionally or unintentionally -- the facts. Bennett offers a few examples of poor analysis in each of these fields.

  • Engineering: When the Australian Labour Party promoted the Australian National Broadband Network (NBN), developers insisted that the fiber-optic cables that would be used could meet any future need and were the only cables that could handle video streaming. Neither of these claims is true. As networks become more mobile, fiber will not be "future proof." And the network load from video streaming is likely to grow slowly, as increases in tablets reduce bandwidth. Nevertheless, program advocates overstated capacity requirements and insisted that the market could not deal with these problems.
  • Economics: When the Open Technology Institute pushed for a system similar to NBN in the United States, they used a method of analysis that completely distorted costs by using carefully-selected data. For example, they compared speeds and prices of broadband connections in a random selection of U.S. cities (including Bristol, VA, New York, NY, and Lafayette, LA) to cities like Hong Kong, in an attempt to prove that the U.S. system was not working.
  • Law: Net neutrality supporters have based their arguments on principles that apply to the telephone industry, without providing any explanation of how those principles apply to the internet.
  • Policy: When New York Times reporter Edward Wyatt reported on the U.S. broadband industry, he wrote, "The United States... is falling dangerously behind in offering high-speed, affordable broadband service to businesses and consumers, according to technology experts and an array of recent studies." Actually, he had no data whatsoever to support a downward trend from international rankings. He also left out any mention of U.S. wireless networks, despite the fact that the United States has the best LTE coverage in the world.

Policymakers need to be able to recognize this type of poor analysis before using it as a basis for lawmaking. All of these instances, Bennett found, came from advocates seeking a greater role for government in the technology sphere. When markets are functioning well, there is no need to mess with them, and regulating industries based on bad analysis only hurts consumers and slows progress.

Source: Richard Bennett, "System Error: How Bad Analysis Poisons Tech Policy," American Enterprise Institute, January 28, 2014.

 

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